HollyFrontier lets contract for new unit at Navajo refinery

HollyFrontier Corp. has let a contract to Haldor Topsoe AS to provide technology licensing for the operator’s previously announced plan to build a new renewable diesel unit (RDU) at its 100,000-b/d Navajo refinery in Artesia, NM (OGJ Online, Nov. 19, 2019).

As part of the contract with HollyFrontier subsidiary Artesia Renewable Diesel Co. LLC, Topsoe will license its proprietary HydroFlex technology, as well as supply basic engineering, proprietary equipment, catalysts, and technical services for the new RDU, which comes as part of HollyFrontier’s expansion into renewable fuels, the service provider said on Jan. 29.

Implementation of HydroFlex technology for the unit will enable the refinery to reduce its cost of compliance with US Environmental Protection Agency (EPA) mandates for how much biofuel must be blended into fuels sold in the US market by enabling production of clean, renewable diesel from all-renewable feedstocks, Topsoe said.

While Topsoe did not confirm a value of the order, the service provider did confirm HollyFrontier awarded the contract following an in-depth feasibility study involving competing technologies.

Upon announcing the project in late 2019, HollyFrontier said the RDU will have a production capacity of about 125 million gal/year, allowing the refinery to process soybean oil and other renewable feedstocks into renewable diesel to help meet demand for low-carbon fuels while covering the cost of the operator’s annual EPA-regulated RIN purchase obligation under current market conditions.

HollyFrontier said it expects a total capital cost of $350 million for the RDU project, which will include corresponding rail infrastructure and storage tanks.

To be funded with cash on hand and anticipated to generate an internal rate of return between 20-30%, the RDU project is scheduled to be completed during first-quarter 2022.